Success of the app means different things for many people. This factors where described in the first article published on this blog. If one of them is the amount of money your solution generates with keeping good User Experience – this article is created specially for you.
Monetization methods
There are many ways to generate income from your solutions. Knowledge about this capabilities will let you plan better your monetization strategy and determinate application success. Let’s briefly mention most popular ones. If your are aware of all of them, you may skip to the next chapter to read how this methods impacts your users.
Ads
Free applications with ads are commonly seen in the all major app stores. It is easy income stream, but year after year generates smaller amount of money for individual developers. There are multiple types of ads that you may implement inside your solution:
- Banner ads – Most popular type of advertising in mobile. These small pieces of colorful images are almost identical with traditional ads seen in the web. Banners are usually placed at the top or bottom of the app’s screen.
- Interstitial (full screen) ads – Application displays advertising on the whole screen. Usually static image or simple animation.
- Advanced overlay full screen ads – These are similar to interstitial ads but are much more interactive. They may even be a micro games inside the ads
- Rewarded video ads – Another type of interstitial ads. Users are encouraged to watch a video ad by promise of the in-app reward.
- Native ads – They imitate native elements of the application. Ads fit the look and feel of non-adverstising content units. Common types of native ads are: App Wall, Carousel, Chat List, Content Stream.
- Notification ads – These ads are displayed as a pop up in the mobile device’s notification center or status bar. They may look like standard message from the app.
Most of these types are offered by major advertising networks like Admob, Mopub, Mobfox, Leadbolt or Smaato.
Paid apps
Probably the oldest type of income stream from mobile applications. User finds your solution in the app store and makes the purchase. Very simple and convenient method for developers. This type was the fundament of the first businesses based on apps, but now there are much more possibilities to explore.
Freemium (In-app purchases)
User is able to download the app for free and use it’s basic features. Some parts of the application are revealed after purchase that is made inside the app. Both Apple App Store and Google Play Store offers the possibility to implement this income stream. Moreover, this method is becoming more and more popular every year. There are some types of in-app purchases. Those that are consumable (used for example to buy virtual currency, extra health, or experience points), and non-consumable (upgrade to premium version, ad removal, bonus game levels).
Subscriptions
This type of monetization is sometimes an element of the in-app purchase mechanisms. Basically there are two types of subscriptions: auto-renewing and non-renewing. Auto-renewal is usually made monthly, but there is a possibility to make it even weekly or once a year.
Sponsored app
If your solution may become the subject of interest of other companies you can try to convince them to sponsor your app. This method does not have implementation tips described by Apple or Google. You will have to implement it on your own based on requirements of your potential patron.
Selling the app
You can always try to make money by selling your solutions. However in this article we will not consider this case, because it does not depend from you if the result of this transaction will be improved User Experience.
How to implement user-friendly monetization method in the mobile app.
Now, when you are aware of all major methods that may generate income for you. Learn how this things impacts your users. Some will work fine in your application, but some may generate good income only in particular types of the apps.
You have to also resist the temptation of quick money. Apps may become the easy way to get quite big income, but it is also easy to discourage people to download your solutions in the future. Take care about your users. They are the biggest value of your product, without them your app will be never successful. Without them your solution will not generate income. Place user in the first place, then plan how to implement fair monetization method. Following tips will help you with this task.
Ads
In theory releasing useful free application with ads may be an easy recipe for popular mobile solution with fair revenue. However, it is easy to hurt your users and annoy them by implementing the advertising badly. You can use following types of ads:
Banner ads – Users are familiar with these ones really well. However, banners may be ineffective because they are more distracting than other forms. This ads may irritate your users, because they are always visible on the screen while they use your solution.
Interstitials and advanced overlay (full screen) ads – If this ones are implemented in the right way, good UX of the app can be maintained. To do this ensure that your user will not see the ad too often. For example: Interstitial may be displayed after finishing the game level, or ending a task. If ad does not interrupts the experience of using your solution, it’s very likely that ad will generate clicks without causing frustration.
Rewarded video ads – Perfect monetization method for games. If the reward will be something that your users would like to receive, it can even increase the positive impression of your app. This prizes may be some kind of points, virtual currency, or anything you can provide in the context of your solution. This ad type should work nicely with in-app purchases, where some users prefer to buy virtual points, but some want to get them for free. Let your users decide.
Native ads – The visual form of these ads may fit perfectly to your solution However, users may feel cheated. Clearly communicate that element that user actually see is the advertisement not the feature of your solution. This one can generate good income, but may be risky when you think about positive UX.
Notification ads – These ads are the dark side of the monetization methods. They can generate big income, however they are not loved by users, and could damage your app’s reputation. If you insist on implementing this ads, always inform your users that you app include notifications. What’s more, try not to push ad messages everyday, do it once or twice a week maximum. Even if you will implement notification ads this way your app will still annoy users. Note that major app stores will reject your solution if you will include these ads.
Paid apps
Paid app seems to be a fair method of generating income and in the most cases it is. However, remember that you create a barrier between your product and user, by telling him to buy it before he can use it. Some people do not want to purchase digital solutions before they test it. To make this barrier smaller prepare as much useful resources for users as you can. Make the demo video, prepare tons of screenshots. Application description should be also comprehensive and easy to read. Take care about good reviews of the application and encourage users that already purchased the solution to share their positive opinion. Paid apps works good for good high quality applications. The ones that guarantee user’s satisfaction after the purchase.
Freemium (In-app purchases)
Probably the most fair monetization method. It lets user test the solution and use the basic features of the solution. If your users is satisfied by free part of the app, he will surely try to purchase premium features. On the other hand in-app purchases are often overused in apps, where user is forced to buy point and virtual currency to continue playing. Implement this method wisely. For games, you may combine in-app purchases with rewarded videos to give user an alternative. In the standard apps, give your user basic functionality for free. Additional features, syncing possibility or some kind of shortcuts can be implemented with in-app purchases. Additionally remember that in-app purchased are not shared with family members in Family Sharing (program created by Apple).
Subscriptions
Consider subscriptions when your solution generates costs regularly (for example: working servers or cloud services) or you create app with constantly updating content for example a magazine, music streaming or video on demand services. Users have to understand that you do not try to make regular income stream without purpose. Always clearly communicate benefits of becoming one of the subscribers. Do not set renew the subscription for too often, it should be done at least once a month. You can also prepare some discounts for annual renewal option. Same as in-app purchase, it is good practice to give basic functionality for free before subscribing.
Sponsored app
There is no easy way to implement it. You will have to figure it out on your own. Sponsorship may be done by an additional logotype of a patron in the splash screen, or it may be more interactive element placed in the app. If your app will be a free solution released without the regular ads, it should result in positive reactions from users. However, always choose your sponsor wisely, it should be natural for the user that this company supports your solution. Remember that sponsorship may be a form of advertising so take also the best practices from this type of making money.
Summing up
Every monetization stream is created for developers to earn money from their successful apps. Majority of income streams may be easily implemented without compromising positive User Experience. Some requires more work and knowledge to ensure it. There are also some that will surely annoy your users and you should avoid them.
I hope that this knowledge will give you opportunity to monetize your solution with care about your users. Thinking about monetization before the release is a good practice often forgotten by beginners in mobile market. If you would like to avoid other common mistakes you may find this article useful.
There is nothing wrong in monetizing your solution, but always remember about your users. They are the fundament of your solution’s success.
